Consider these key areas before joining a partnership business

Partnerships have many benefits that include complementary skill sets, shared equipment or expenses, and the opportunity to work with someone who has capital and another with the intellectual capital. However, partnerships will not work for every business venture as they involve handling messy partnership issues, different egos and the stresses of running a business.

However, if you are considering a partnership, here are a few areas to consider.

Sharing capital instead of expenses – If you intend to share your capital, you should be aware of the possibility that your partner may not use your resources be it money, information or expertise in the way you had planned. Therefore, work to create an arrangement that expenses are shared so that in the event the partnership does not work, you will be able to move away with less hassle.

Partnering with someone because you can’t afford to hire – This is not a good idea as both parties may work against each other as they find that they are not a good partnership match in regards to egos, attitudes and work ethics. Therefore, look at hiring the skill or work on an independent contractor agreement.

No written, signed partnership agreement – A clearly detailed partnership agreement will outline the role of each partner. Look at writing a legal agreement with a mutually agreed upon lawyer.

Overlooking a limited partnership – If one partner is only investing their capital, you can draw up a limited liability partnership, which does not leave both parties liable for the actions of the other.